Apparel Online Bangladesh Magazine November Issue 2018 | Page 37

BANGLADESH CANVAS
Bangladesh can double its trade in South Asia:
WB report
World’s second biggest apparel
manufacturer and exporter,
Bangladesh, has the potential to
more than double its trade with
South Asian nations by exploring
intra-regional trade, the World
Bank has said in its report
published recently.
The global lender, in its report
said, intra-regional trade in
South Asia, which remains one of
the lowest in the world, has the
potential to grow up to three times
from US $ 23 billion now; just by
removing man-made barriers like
tariffs and distrust.
The report titled ‘A Glass Half
Full: The Promise of Regional
Trade in South Asia’ was
published jointly by WB and
the Policy Research Institute
of Bangladesh. The report was
launched during an event at Hotel
Amrai in Dhaka. Bangladesh’s
Finance Minister AMA Muhith
was present at the programme.
Trade within the South Asian
region accounts for about 5 per
cent of the region’s total trade,
the report said, dubbing it
whimsically low against 50 per
cent in East Asia and the Pacific.
It said the large gaps between
actual and potential trade arise
because countries in the region
have erected barriers against
each other.
The World Bank identified four
critical barriers towards intra-
regional trade: tariffs and para
tariffs, real and perceived non-
tariff barriers, connectivity costs
and a broader trust deficit.
Sanjay Kathuria, World Bank’s
Lead Economist and Lead Author
of the report, said, “Trust between
countries is in short supply in
South Asia.”
Zaidi Sattar, Chairman of
Organising Institution Policy
Research Institute, said South
Asia has the potential to stimulate
rapid growth and economic
prosperity in the region and
contribute to pulling millions
out of poverty. “The region’s
trade with the rest of the world
is leaping big for the last quarter
century. But, the intra-regional
trade has declined.”
The intra-regional trade has come
down to 2.5 per cent from 5 per
cent, posted before the signing of
the South Asian Free Trade Area
(SAFTA) agreement in 2004, said
Sattar citing a PRI research.
The WB said the costs of trade
are much higher within South
Asia compared to other regions.
The report stated, “The average
tariff in South Asia is more than
double the world’s average. South
Asian countries have greater
protection for imports from the
region than from the rest of the
world.” The report said that the
countries impose high para-tariffs
and more than one-third of the
intra-regional trade falls under
sensitive lists, comprising goods
not included under the SAFTA’s
tariff liberalisation.
Trade within
the South Asian
region accounts
for about 5
per cent of
the region’s
total trade,
the report
said, dubbing
it whimsically
low against
50 per cent in
East Asia and
the Pacific. It
said the large
gaps between
actual and
potential trade
arise because
countries in
the region
have erected
barriers against
each other.
In case of Bangladesh, nearly 46
per cent of the country’s imports
from the region fall under the
sensitive lists. “The South Asian
countries are yet to reap the
benefits of shared land borders.
This arises from deficiencies in
border regimes, including limited
information flows on non-tariff
measures, and inadequate use of
modern clearance procedures,”
the report further elaborated.
Limited air connectivity makes
regional trade and investment
costlier. The report recommends
targeting sensitive lists and para
tariffs to enable real progress on
the SAFTA and calls for a multi-
pronged effort towards addressing
non-tariff barriers, focusing on
information flows, procedures,
and infrastructure.
Bangladesh’s trade with South
Asia is US $ 7.6 billion, which is
about 9 per cent of its global trade
of US $ 84.3 billion. The report
said increased regional trade can
accelerate Bangladesh’s growth
and create more employment
opportunity for men and women.
“Bangladesh can become
an economic powerhouse by
deepening regional and global
integration in trade, connectivity,
energy, and investment,” said
Qimiao Fan, Country Director of
the WB for Bangladesh, Bhutan,
and Nepal. For increased regional
trade, the country needs to focus
on improving its trade policy
regime.
The report said limited air
connectivity with South Asia
is inhibiting Bangladesh from
taking full advantage of potential
investment and trade in services.
Addressing the programme,
Finance Minister AMA Muhith
said it is not possible to go back
to the pre-partition era when the
market of the subcontinent was
integrated. “We should maintain
good relationship with the
neighbouring countries and allow
more cross-border trade,” FM
stated.
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